Search This Blog

The purpose of www.AlfaBloggers.com is for Social Media Entrepreneurs to find support in starting their own Blog / VLog based product lines, and To bring Social Media People together to help create new, innovative products into our Blog based Marketplace.

Lufthansa steps up Cost Cuts as results beat forecasts

Deutsche Lufthansa will widen its cost-cutting drive to counter rising fuel prices and sluggish growth in its core market, it said on Wednesday after announcing better-than-expected results.

Lufthansa shares gained 6.6 percent to the top of Germany's blue-chip DAX index after cost savings helped its third-quarter operating profit rise to 648 million euros, beating the consensus of 479 million euros in a Reuters poll.

Lufthansa warned some of the additional cuts it plans would be "painful", which some analysts said could indicate more job cuts. The carrier said it would not provide details before the end of the year.

"The environment in which we have to operate is getting more and more demanding," said the German airline's Chief Executive Christoph Franz.

Lufthansa has already frozen investments, announced job cuts and is combining its loss-making European short-haul unit with its low-cost carrier Germanwings to improve its earnings.

But recent economic data shows business sentiment in its core markets in Germany, Austria and Switzerland - so far relatively robust in the crisis - is deteriorating as companies struggle with a bleaker economic outlook.

"The climate is becoming rougher," Franz said.

Europe's biggest airline by revenue had already warned in September that gains from its cost-cutting programm - dubbed SCORE - would be offset by high jet fuel prices and a slowing economy, as well as fees and materials costs.

COST OF FUEL

Fuel costs, which gobble up a third of traffic revenues, surged in the third quarter after jet fuel climbed back above $1,000 per tonne in September, or 14 percent higher than last year. A stronger U.S. dollar also makes it more expensive for Lufthansa to buy fuel.

Lufthansa said it expected its fuel costs to rise 1.1 billion euros to about 7.4 billion this year.

Europe's established airlines, hit by competition from discount carriers and Gulf rivals, are restructuring to reduce costs. Among others, Air France-KLM is shedding about 5,000 jobs, with Lufthansa cutting 3,500.

Analysts expect IAG to announce a new restructuring plan for Iberia on Nov. 9, having completed one for British Airways last year. Loss-making Scandinavian airline SAS said on Tuesday it would slash costs and sell assets.

For Lufthansa, a focus on slimming down its cost base is already paying off. In the third quarter, its operating profit exceeded forecasts thanks partly to a strong performance by its revamped Austrian Airlines business, recovering from years of losses.

DZ Bank analyst Robert Czerwensky said the figures were very good but that they could weaken Lufthansa's position in talks with cabin crew, who went on strike in September, causing more than 1,000 flight cancellations.

Rival Air France-KLM also reported a rise in operating profits for the quarter on Wednesday. The third qurter is traditionally strong a period for European airlines which usually benefit from summer travel.

Lufthansa reiterated its 2012 forecast that operating profit would be in the mid-hundreds of millions of euros. That does not include restructuring costs, which it said it now expects to be no more than 100 million euros this year as talks with unions on some measures planned as part of SCORE are dragging on.

Water Melons Management Story 1 . Rahul : B Tech IIT [D] MBA IIM [A] 2. Ankur: B Tech IIT [D] MBA IIM [A] 3. The Manager : Mr Raju John3. Company : AeroSoft Corp 4. University : IIM Ahamdabad RahulandAnkurjoined a company called AeroSoft Corp together a few months after their Post Graduation from IIM A University. After a few years of work, their Manager promoted Rahul to a position of Senior Sales Manager, but Ankur remained in his entry level Junior Sales Officer position. Ankur developed a sense of jealousy and disgruntlement, but continued working anyway. One day Ankur felt that he could not work with Rahul anymore. He wrote his resignation letter, but before he submitted it to the Manager, he complained that Management did not value hard working staff, but only promoted only the favoured ! The Manager Mr Raju John knew that Ankur worked very hard for the years he had spent at the company; even harder than Rahul and therefore he deserved the promotion. So in order to…

Trisha Karmakar is the queen of her own dreams, who has just stepped into her twenties. Having lived in New Delhi for 8 years and in Bangalore for 5, she has all that is necessary to have an uninfluential mindset about the world and of course, herself. Presently settled in Kolkata, she is pursuing graduation in psychology from Bethune College, which is renowned as the first women's college in Asia. Having said that, yes, listening to people is what she believes herself to be the best at. She has a very exceptional vision towards life and welcomes everything life throws at her, let that be a bundle of joy or a heap of sorrow. She believes it's a blessing to be alive each day with so much yet to be explored. Also, she is independent about her own thoughts and has her own way of doing things. She has been trained as a Hindustani Classical vocalist for 10 years. Apart from music, writing and reading has always succeeded to pacify her, no matter the world around her. She is very m…